George C. Halvorson is chairman and chief executive officer of Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals, headquartered in Oakland, California. Kaiser Permanente is the nation’s largest nonprofit health plan and hospital system, serving more than 8.6 million members and generating $40 billion in annual revenue.
George Halvorson serves on the Institute of Medicine Task Force on Evidence Based Care and the Commonwealth Commission for a High Performing Health System. He serves on the American Hospital Association’s Advisory Committee on Health Care Reform. He chairs the World Economic Conference Health Governors for 2009 and chairs the International Federation of Health Plans. He has received the Modern Healthcare/Health Information and Management Systems Society CEO IT Achievement Award. The Workgroup for Electronic Data Interchange also awarded him the 2009 Louis Sullivan Award for leadership and achievements in advancing health care quality.
Halvorson has written several health care reform books, including the newly released Health Care Will Not Reform Itself: A User’s Guide to Refocusing and Reforming American Health Care. He also wrote Health Care Reform Now!, Health Care Co-ops in Uganda, Strong Medicine, and Epidemic of Care as guidebooks for health care reform.
Halvorson served as an advisor to the governments of Uganda, Great Britain, Jamaica, and Russia on issues of health policy and financing. His strong commitment to diversity and inter-ethnic healing has led him to his current writing project, a new book about racial prejudice around the world.
Prior to joining Kaiser Permanente, Halvorson was president and chief executive officer of HealthPartners, headquartered in Minneapolis. With more than 30 years of health care management experience, he has also held several senior management positions with Blue Cross and Blue Shield of Minnesota.
Question: Is there a foreign model that should be held up as a paradigm?
George Halvorson: You know, I’ve spent a lot of time looking at foreign models. I actually chaired this year, the Health Governors of the World Economic Congress in Davos, and I’m the current chair of the International Federation of Health Plans. And that’s health plans from 80 countries around the world. And so I meet all the time with health plans from those other countries. And I have been looking hard to figure out which attributes of those plans would fit in the U.S. and one of the things I’ve learned from working from all of those countries is that every single one does it a little differently.
So, the model in Germany looks a lot like the Netherlands, but it’s not quite the same. Austria, different than both of those, but quite similar. In fact the model that Governor Schwarzenegger proposed in California last year looks suspiciously like the Austrian model. Every country does it slightly differently.
But if I were going to pick a model that I think would transplant well, it’s actually the Dutch model. I think the Dutch have done some really good things. And the thing that they have added to their model more recently is a risk adjuster between the health plans. So, when the health plans go out and recruit members and enroll people, the government in the end does an assessment of who got the healthy people and who got the less healthy people. And if any health plan got a disproportionate number of healthy people, they have to actually pay some money back into the pool. And any health plan that got too many sick people they get more money from the pool. And so what that does is strongly encourage, as we were saying earlier, the health plan to go after the sicker people and do a really good job taking care of sick people because they know in the end they get a risk adjuster from the other plans that enrolled healthier people. So, I think the Dutch model of having payroll deduction, individual choice health plans and then a risk adjuster in the back end has a lot to offer.
It’s a federal model. They basically, in the end of the year, run the core information about each health plan, about how many diabetics do they have, how many congestive heart failure patients, how many asthmatics. They sort through the whole thing and then basically run a formula and if you have enrolled a disproportionate number of people with those expensive diseases in a high level of morbidity, they increase your payment, or if it’s a low level, they decrease your payment. And actually, we do that to some degree in this country on our Medicare Advantage program. We have a risk adjuster formula that works in America, it’s a pretty good formula, it’s not perfect, but it’s a lot better than no formula, and so we already have a history of doing that. We could adapt to the Dutch model fairly easily.
Recorded on: September 21, 2009